TIOL-DDT 1489 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1489</font><br>
18.11.2010<br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Processing and Settlement of Export related receipts facilitated by Online Payment Gateways - RBI Guidelines </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>OF </strong>late, Online Payment Gateways have emerged as a popular mode of facilitating e-commerce transactions. Some of these Online Payment Gateway Service Providers (OPGSPs) have also been facilitating cross-border transactions. RBI has recently reviewed the service model provided by these OPGSPs with reference to the provisions of the Foreign Exchange Management Act (FEMA), 1999. It was observed that a few OPGSPs have not only facilitated conclusion of the transactions but also allowed exporters to retain the export proceeds abroad without repatriation resulting in violation of the provisions of FEMA, 1999. Acknowledging however the importance of the services provided by the OPGSPs to the exporters, particularly in facilitating small value export transactions, it has been considered necessary to issue a set of guidelines to cover such e-commerce arrangements. Accordingly, it has been decided to allow the Authorised Dealer Category- l (AD Category-l) banks to offer the facility of repatriation of export related remittances by entering into standing arrangements with OPGSPs, subject to the following conditions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The AD Category-I banks offering this facility shall carry out the due diligence of the OPGSP. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ This facility shall only be available for export of goods and services of value not exceeding USD 500 (US Dollar five hundred). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ AD Category-I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A separate NOSTRO collection account may be maintained for each OPGSP or the bank should be able to delineate the transactions in the NOSTRO account of each OPGSP. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The following debits will only be permitted to the NOSTRO collection account opened under this arrangement: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Repatriation of funds representing export proceeds to India for credit to the exporters' account; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Payment of fee/commission to the OPGSP as per the predetermined rates / frequency/ arrangement; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Charge back to the importer where the exporter has failed in discharging his obligations under the sale contract. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The balances held in the NOSTRO collection account shall be repatriated and credited to the respective exporter's account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the NOSTRO collection account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ AD Category -I banks shall satisfy themselves as to the bonafides of the transactions and ensure that the purpose codes reported to the Reserve Bank in the online payment gateways are appropriate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ AD Category -I banks shall submit all the relevant information relating to any transaction under this arrangement to the Reserve Bank, as and when advised to do so. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Each NOSTRO collection account should be subject to reconciliation and audit on a quarterly basis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Resolution of all payment related complaints of exporters in India shall remain the responsibility of the OPGSP concerned. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ OPGSPs who are already providing such services as per the specific holding-on approvals issued by the Reserve Bank shall open a liaison office in India within three months from the date of this circular, after duly finalizing their arrangement with the AD-Category-I banks and obtaining approval from the Chief General Manager, Reserve Bank of India. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2010/rbi10cir017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Reserve Bank Circular No. 17/RBI Dated November 16, 2010. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax – Married Woman's Income to be clubbed with Income of Her Husband?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">SECTION 45(1) The income of a married woman living with her husband shall be deemed to be the income of the husband for the purpose of ascertaining his total income, and shall be assessed on, and the tax thereon charged on, the husband; but that part of the total amount of tax charged on the husband as bears the same proportion to the total amount as the amount of the income of the wife bears to the amount of collection and recovery of tax shall apply to that part of the tax as if it were tax the due date for the payment of which is a date thirty days after the date of a notice served on the wife, or her executors or administrators, as the case may be, requiring payment. </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that the income of a married woman shall not be deemed to be the income of the husband where such married woman opts to file a separate return from that of her husband. </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where a married woman is not living with her husband, each spouse shall, for the purposes of the Act, be treated as if he or she were unmarried. </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ For the purposes of this Act, a married woman shall be treated as living with her husband unless- </font></strong></font></p>
<blockquote>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. they are separated under an order of a court of competent jurisdiction or under a written agreement of separation; or </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. they are separated in such circumstances that the separation is likely to be permanent; or </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. she is a resident person and her husband is a non- resident person. </font></strong></font></p>
</blockquote>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is this discrimination against men or women? The liability is always on the man unless his wife chooses to file her return and the man has no choice! If the woman chooses not to file the return, Revenue Authorities can collect tax and penalty from the husband. The husband can even go to jail if the wife does not file her return and does not tell her husband what her income is. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Don't worry; you are not affected. This is the Income Tax Act of Kenya, Section 45 of which provides this special provision for women regarding tax matters. Getting married may not be the best of economic propositions for the Kenyan men. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">OIL - New Gold for Smuggling </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MORE</strong> than four years ago in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3841" target="_blank">DDT 382</a></strong>, we reported that Gold smuggling is no more lucrative – Oil smuggling is. Oil smuggling still seems to be lucrative. In the last ten years, there has been an increase of 70 percent in the number of registered vehicles in Philippines – but during this period the consumption of petroleum products, instead of increasing, decreased by 27%. Many of those vehicles run on smuggled oil. The oil smuggling industry is humungous. And they can buy a lot of officers, legislators and judges across the Globe! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone's tryst with HMRC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VODAFONE</strong> bought the German firm Mannesmann for £112bn and channelled the loans it raised for the purchase through a subsidiary in the Luxembourg tax haven. It lent the money on to Vodafone's German operation. Her Majesty's Revenue inspectors in UK were clear that the billions in interest payments Vodafone had built up virtually tax-free in Luxembourg should be liable for tax in Britain. But HMRC entered into a deal with Vodafone whereby Vodafone would pay a mere £800m upfront and another £450m over the next four years, leaving an estimated £6bn of potential tax revenue in its coffers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone's tax troubles in India are far from over. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Only Little People Pay Taxes </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> notorious statement by Leona Helmsley, a New York billionaire nicknamed 'queen of mean' actually landed her in jail. She claimed expenses for remodelling her mansion as business expenses and evaded income tax. In the case against her, one of her housekeepers testified that when he told her that she must be paying a lot of taxes, she replied, “ We don't pay taxes. Only the little people pay taxes. " </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But when the Court found her guilty, she pleaded for mercy, “ I'm guilty of a serious crime. I'm more humiliated and ashamed than anybody could imagine. I feel as though I have been living through a nightmare for three years”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the judge was not convinced. He told her,<em> “You bear full responsibility for this scheme. It was carried out under your direct orders for your benefit. Unlike many defendants who come before the court, you were not driven to this crime by financial need. Rather, your conduct was the product of naked greed. Throughout its course you persisted in the arrogant belief that you were above the law. Moreover, since the indictment and the trial, you have displayed no remorse or contrition. I trust that the sentence today <strong>will make it very clear that no person, no matter how wealthy or prominent, stands above the law</strong></em>” . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She served 18 months in jail and after her release in 1994 became very generous with her wealth and when she died in 2007, most of her huge wealth went to several charitable trusts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even the big people have to sometimes pay taxes – in USA</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Friday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Simultaneous availment of CENVAT credit and depreciation on capital goods – revised IT return filed reducing depreciation amount by CENVAT Credit – adjudicating authority allowing credit and dropping demand – when demand gets dropped, penalty cannot survive: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant availed CENVAT credit of Rs.2,24,400/- on capital goods and simultaneously claimed depreciation of the duty element paid on the capital goods under section 32 of the Income Tax Act, 1961 during the period 2004 -05. On being pointed by the Excise audit, the appellant subsequently filed revised Income Tax returns for the year 2005-06 and 2006-07 wherein they reduced the amount of depreciation claimed on account of capital goods to the extent of amount on which they have availed CENVAT credit. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Business expenditure - Whether necessity of supporting bills cannot be dispensed with even if payments are made by credit cards? - Yes, payment by credit card on its own does not prove genuineness of expenditure: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether the necessity of the supporting vouchers/ bills cannot be dispensed with to prove the genuineness and purpose of the expenses even if the payment was made through the credit card. Whether the assessing officer was justified in disallowing the purchases done by the assessee as not genuine when the assessee has produced the evidence of payment of these purchase through cheques. The Tribunal says YES for the first question and NO for the second. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether the process of pickling and oiling of HR sheets/strips amounts to manufacture u/s 2(f) of CEA, 1944 and whether Cenvat Credit can be availed on HR steel sheets/strips – Issue of Recurring nature – Out-of-turn hearing granted: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THIS</strong> application filed by the appellant seeks out-of-turn hearing of their appeal, mainly on the ground that the issue involved in this case is of recurring nature. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice DAY. </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
</body>
</html>